B.C. Hydro rates to rise another 8.1 per cent in next five years

B.C. Hydro’s electricity rates are expected to increase 1.8 per cent on April 1 and another 0.7 per cent in 2020, part of a five-year program that will see rates rise by 8.1 per cent in the next five years.

The lower rates for the next two years are made possible by a $1.1 billion write-off of one of the utilities deferred debt accounts.

Energy Minister Michelle Mungall announced the new rate plan Thursday, emphasizing the impact has also been reduced by a cost-cutting review of the utility. That includes scaling back B.C. Hydro’s capital plan by more than $2 billion, while carrying on with necessary upgrades to aging dams and infrastructure around the province.

The rate increases are subject to approval by the B.C. Utilities Commission, which Mungall said will not be interfered with as it has in the past. If approved, the 2019 increase would cost the average customer who pays $1,000 a year for electricity another $18.

The plan includes suspending B.C. Hydro’s “standing offer program” for independent power producers and renegotiating existing power contracts, which the NDP government paused when it formed government in August, 2017. Some projects in the works have Indigenous partners in remote communities, and a consultation will be held to measure impacts.

B.C. Hydro currently has power purchase agreements with 19 wood waste generators, burning waste fibre from sawmills and pulp mills to generate steam and electricity. Those are to be kept going to help the mills manage their wood waste, while technology to convert wood fibre to biofuels is explored, Mungall said.

The plan includes suspending B.C. Hydro’s “standing offer program” for independent power producers and renegotiating existing power contracts, which the NDP government paused when it formed government in August, 2017.

The NDP’s long-standing warnings about cumulative costs of long-term private power contracts were reinforced this week with a report commissioned by the ministry showing the contracts forced B.C. Hydro to buy power it did not need at above-market rates. That report estimated that the costs of private power will cost the average customer an extra $200 per year over the next 20 years.

Earlier demand forecasts showed B.C. Hydro would need more power than it projects today. Some mills and industrial operations have shut down, including the recent announcement that Mount Polley Mine near Quesnel is suspending operations due to low copper prices.

B.C. Liberal energy critic Greg Kyllo defended the previous government’s decision to seek energy self-sufficiency, even in the lowest water years, to reduce or eliminate the power being imported from other jurisdictions, most of which used coal or gas for at least some of their generation.

Kyllo questioned the fairness of the independent report by former B.C. Treasury Board director Ken Davidson, entitled “Zapped.” Davidson was a staffer in the previous NDP government who was brought in to provide the government with the conclusions it wanted, Kyllo said.